A report compiled by two select committees of MPs concluded Carillion’s board, auditors and regulators were responsible for the group’s failure.

Carillion directors showed "recklessness, hubris and greed", the MPs said

Carillion’s “delusional directors” drove the firm off a cliff then tried to blame “everyone but themselves”, according to MPs.

The outsourcing company entered insolvency in January after racking up a debt pile of £1.5bn and failing to secure a rescue deal in talks with lenders and the government.

The collapse of Carillion led to thousands of job losses and put many of its contracts in jeopardy, including large construction projects and government services such as prison maintenance and NHS cleaning.

A report compiled by two select committees of MPs concluded Carillion’s board, auditors and regulators were responsible for the group’s failure.

Carillion directors' actions driven by greed, report claims

It accused directors of "recklessness, hubris and greed" by prioritising senior executive bonus payouts and dividends for shareholders despite the company nearing collapse.

The directors also treated pension payments as a "waste of money", the report claimed.

Former chairman Philip Green defended the directors’ actions, saying: The board always sought to make decisions on the best available information and with the best professional advice; furthermore we always strived to act in the interests of the company and all its stakeholders."

CMA must consider breaking up big four accounting firms, says MPs

The so-called ‘big four’ accounting firms – PwC, KPMG, Deloitte and EY – were also accused of operating as a “cosy club incapable of providing the degree of independent challenge needed”.

KPMG had not scrutinised Carillion's financial judgements and its “long and complacent” tenure of "cursory" audits at the company were not an isolated incident but "symptomatic of a market which works for the members of the oligopoly but fails the wider economy", the report said.

MPs added that PwC was "continuing to gain" as its official receiver "without adequate scrutiny" and that Ernst & Young was paid £10.8mln for "six months of failed turnaround advice".

Deloitte received £10mln to be Carillion's internal auditor but was either "unable or unwilling" to identify financial failings or "too readily ignored them", they said.

The MPs urged the UK Competition and Markets Authority to consider breaking up the ‘big four’ accounting firms over their involvement in the “rotten corporate culture” at Carillion.

KPMG insisted it conducted audits of Carillion "appropriately", while PWC defended its role as official receiver, saying its priority has been to “keep public services running safely across the country while saving thousands of jobs”.

Ernst & Young said it was "extremely disappointed that despite all efforts the business was not rescued" and Deloitte said it was "disappointed with the conclusions of the committees".

Carillion suppliers 'left fighting for survival

Rachel Reeves MP, chair of the business (Beis) committee, said: "Carillion's collapse was a disaster for all those who lost their jobs and the small businesses, contractors and suppliers left fighting for survival.

"The company's delusional directors drove Carillion off a cliff and then tried to blame everyone but themselves."

"However, the auditors should also be in the dock for this catastrophic crash. They are guilty of failing to tackle the crisis at Carillion, failing to insist the company paint a true picture of its crippling financial problems."

Regulators 'too passive' in tackling Carillion's problems

The government and regulators were also blamed for playing a role in Carillion’s demise.

MPs said regulators were too "passive" in tackling Carillion's issues and that the government had "nurtured" an environment in which the collapse of an outsourcing firm was "a distinct possibility".

"This has been another successful year in which the group has achieved a 25% uplift in NAV, significant lettings successes across recently completed developments leading to a 21.49% increase in contracted rent and a strong performance across our key metrics," said the CEO, John Arnold.

Carillion plc is one of the UK's leading support services and construction companies, employing around 50,000 people, with annual revenue of around £5 billion, and operations across Britain and in Europe, Canada, the Middle East, North Africa and Caribbean.

Carillion plc is one of the UK's leading support services and construction companies, employing around 50,000 people, with annual revenue of around £5 billion, and operations across Britain and in Europe, Canada, the Middle East, North Africa and Caribbean.